Analyst Christopher Danely also raised his price target on the stock of the San Diego-based company to $108 from $89.
In a note to investors, Danely said the "long-awaited 5G ramp" was starting to come together this year, adding that Qualcomm is “one of the most exposed stocks to 5G” and 2020 will “be the year where the company experiences accelerating revenue and EPS growth driven by the beginning of the 5G upgrade cycle.”
Danely said that he expects market-share gains, which will lead to higher royalties and average selling prices.
Although Citi has “long-term worries” about Apple's (AAPL) - Get Report own chips and pricing pressures, Danely said that “the 5G upgrade cycle will put these trends on hold for at least the next twelve months."
5G is the fifth generation wireless technology for digital cellular networks that began wide deployment in 2019. Companies and analysts are expecting a range of 175 million to 225 million 5G devices to be delivered in 2020.
Danely is the second analyst this week to raise his price target on Qualcomm. On Wednesday, Canaccord Genuity analyst T. Michael Walkley, who maintained his buy rating on the stock, boosted his price target on the company's shares to $115 from $101.
Walkley said in a note to investors that Qualcomm is "well positioned to benefit from 5G builds, increasing dollar content per phone from RFFE design wins, and maintaining a robust licensing business despite the FTC overhang."